I have the same issue as well. The upgrade was done correctly and the device shows the correct version in the web interface of the camera and mydlink site, but in the mydlink lite application on my iPhone, it shows the "!" on the day/night toggle icon. Clicking the day/night toggle icon in the mydlink lite app will cause the update attempt and soon a message appears saying it has completed successfully. But the icon doesn't change and will still prompt to update after clicking it.
I have done the following and still get the same results, so it is either an issue with the new firmware (or newer mydlink agent) or the iOS mydlink lite application doesn't support this firmware/agent version yet:
Removed and reinstalled mydlink lite application => No change, problem still exists
Removed and readded camera from mydlink account => No change, problem still exists
Initialized/reset camera running the 1.07 firmware => No change, problem still exists
Downgraded firmware to 1.06 => Problem resolved, but new features in 1.07 not available
Upgraded back to firmware 1.07 => Problem is back